We are proud to be attending and speaking at the Lean Kanban North America conference later this month in Chicago. As part of that conference we are running a full day tutorial on Forecasting.

Here are our goals for the one day tutorial –

How to forecast likely delivery dates and costs

How to calculate Cost of Delay and why it matters

How to quantify the benefits of decreasing cycle time in cash-flow and throughput

How to calculate the cost and date impact of defects and blocking events

How to analyze systems for staff imbalance

How to analyze and use historical data when available

What constitutes “enough” historical data and what to do when you have less (or none)

We surveyed the participants and the order listed above is the order the attendees picked. There is still time to register, and we have prepared our tutorial material to maximize one day of learning, with plenty of exercises to take home and continue learning.

“Humans stink at planning through uncertainty, but that doesn’t stop executives, their managers, and financial departments from expecting and acting on estimates fraught with more uncertainty than confidence. Despite this, most project teams go through the ceremonial and demoralizing “estimation” process knowing their estimates are worthless at best, and dangerous at worst. In fact, estimates are so untrusted by everyone that executives, managers, and financial hawks routinely dismiss them, make arbitrary changes and hold the estimates (and those who create them) with utmost disdain.

What can be done about this?

How about forecasting instead of estimating?

What’s the difference? Estimating is typically made up of little more than a wet-finger held to the air. (A bit comical, but not far off the mark.) Some wet-fingers are well-calibrated, but the calibration doesn’t change some of the fundamental flaws of estimation. Foremost of these flaws are the flaws pertaining to the rationale behind the estimates and the ratio of knowns to unknowns to unknowable that common estimation techniques ineffectively handle.

On the other hand, forecasting is based on actual system capabilities. As importantly, forecasting can be tooled to speak to executives in the terms they already use throughout the business — except when it comes to software or IT services. Terms that speak in the language of value rather than the language of cost.

In this tutorial, attendees will learn surprisingly uncomplicated approaches to understanding system capabilities and use this understanding to express the need for resources, time, and process improvements that are quantitatively solid and statistically valid. In other words, attendees will learn how to make a case for staffing, resources, time, and even contractual commitments using basic tools, a little data and a helping of visuals in the forecasting language of executives rather than the estimation language of charity cases.”

Our software has always charted the number of empty positions and queued positions over time which is a close proxy to this measurement and found the sum of Empty and Queued each time period a reliable indicator for forecasting where the stress points are in the Kanban board process. We decided that this liquidity chart might add an easier dimension for people to understand the impact of changes when they are experimenting with our simulation software. So we added the chart.

We are still refining the way it looks and going to add trend lines to make it easier to discern the running average, and we are also building a set of examples that show how it adds value. Remember -this is the ONLY chart where higher is BETTER. All of our other measure are lower is better – causing us some stress internally!